Do you have a true competitive advantage?

Do you have a true competitive advantage?

By James Mason on 07.06.2017

What is the one unique thing about your business that’s hard for your competition to replicate? That compelling reason why existing and prospects choose you over others in the market? It’s easy to simply say ‘we have better customer service’ ‘we pride ourselves on our people’ or ‘we have the most innovative technology’. But are these truly competitive advantages in what is increasingly a cluttered market where many others say the same thing?

I would argue that they’re simply ‘permission to play’ statements (vague, feel good and typically something most businesses should have as a default) and if you run through a random sample of independent advisor or accounting firm websites you’ll probably see these statements coming up time and again. It’s a very homogenised market.

So, what makes a service provider stand out from the crowd? In my opinion the thing that makes the difference between ‘same as the rest’ and ‘success’ is being able to clearly demonstrate capability, have authenticity in messaging and back up claims with evidence and track record.

As an example, our sustainable competitive advantage (SCA) is ‘We will win by being the single biggest impact on the performance improvement of our network members’. The real power in this statement translates into the strategies required to make this a reality:

Depth, relevance and continual improvement of our intellectual property to ensure our people are providing cutting edge solutions to customers,

Be early adopters of practical technologies for our customers,

Intimacy of the coaching support we provide which includes blended training mediums (including face-to-face events in local regions and online training),

Understand both the business and personal goals of the clients we support to ensure all aspects are considered in the advice we provide,

Strategies relating to the delivery of our sustainable competitive advantage cascade through the people, recruitment, training, marketing collateral, customer service and products we provide.

So how do you discover your true competitive advantage? Here are the steps to take:

Brainstorm your key success factors that would be considered of high value to your target customers or ‘A class’ current customers. Make a list of 10.

Rate these out of ten against three factors:
a. the value each advantage will bring to your customers
b. your current ability to beat your competitors in that area, and
c. the factors likely impact on your business if you focused on that as a key driver for your organisation (1 being a very low impact and 10 being a very high impact).

Importantly add the two scores together for A (the value to customers) and C (the factor with high internal impact) and then determine the factor with the highest score.

Add the highest scoring factor to the statement “We will win by……”. This becomes your temporary SCA. Does it feel like a true source of competitive advantage? Potentially you will need to dig down further on that factor to elaborate on the true source of competitive advantage. Now sleep on it, if you are still happy in the morning it’s probably a good candidate for your competitive advantage. You may like to sound it off peers and friendly clients for their insights.

Identify the key capabilities you will need to build and maintain this SCA in the market.

Map out when, how and where you will undertake to build the capabilities needed to create or maintain your advantage into the future.

Provide clear evidence in your marketing communications as to your SCA and evidence as to your capability to deliver on your claims.

A word of caution, in today’s fast changing competitive world, very few SCA’s can be sustained in the long run. The only true SCA is to build an organisation that is so alert and agile that it will always be able to find an advantage no matter what changes occur. Regular checks of your SCA will ensure that you keep in step with strategies and the environment. Review the SCA’s formally each year. If you get it wrong it can bring out the wrong key issues. It often takes weeks of reflection on a potential SCA before it clicks. Don’t rush the process, allow plenty of time

Remember, actions speak louder than words. Best of luck.

4 Comments

Ian Hewitton 07 Jun 2017, 2:37 PM

Really useful reminder about focusing upon client needs as opposed to our own. Using the product surround tool also reminds us of the service needs of our clients.

Michael Burkeon 08 Jun 2017, 12:45 AM

I agree with the comments about many so called “Competitive Advantages”being “permission to play”. Good organisations like Mindshop treat their SCA as a filter to what is important and not important. A new entrant in the Australian food retail sector is Aldi who is smashing their sector through their low cost SCA, and to show the australian consumers that low cost doesn’t mean poor quality. It is how you model it, and what you say yes to and what you say no to.

Susannah Brade-Waringon 08 Jun 2017, 8:16 AM

Good article – which cuts through the detail. We’ll run this as a team exercise next week, with a particular emphasis on what to ‘stop focusing on’. Thanks.

saraon 13 Dec 2017, 10:01 AM

thank you very much
plz what the relationship between TQM and competitive advantages?http://www.ju.edu.jo